The Funding Question Part 2

The Funding Question – Part 2

Continuing the discussion from yesterday

With the following to come:

  1. Where might this funding come from? What are the choices?

  2. How should I vote at the AGM on the Board proposal to fund British Orienteering?

  3. How can we fund British Orienteering to assure the future?

The discussion so far can be found here

If you know how you are going to vote and are clear about the issues already please return your proxy vote if you are not planning on attending the AGM. If you are not 100% sure of the issues and want to know a little more hold onto your vote for a few more days and find out a bit more about the background to the proposal.

 

What level of funding is required to act as a National Governing Body of Sport?

On the assumption that British Orienteering wishes to maintain the recognition of being the National Governing Body of Sport for orienteering there are functions and responsibilities that need to be delivered. These can be summed up as:

So, what are the costs of delivering such services and functions?

Taking the current 2016 budget we can make a fair estimate of the costs. The following table has been published in Focus and provides a good foundation for this discussion.

Column A: The expenditure area and brief description

Column B: The current 2016 Budget containing Salary costs (and recharge to Sport England) and the funded programmes

Column C: ‘Strategic Budget’ which contains the same expenditure but without any funded programmes or government funding support

Column D: ‘Most Prudent’ budget containing a very prudent expenditure – probably the minimum that British Orienteering can deliver and still provide the majority of the services expected of a NGB; it contains no salaries, no programmes, no Focus or membership mailings; although a national office is included

 

EXPENDITURE

2016 Budget

Strategic Bud’

Most prudent

NO SALARIES

Membership, Focus & Mailings

 £ 25,000

 £ 25,000

 

Membership, Insurance, WRE & IO fee

 £ 13,500

 £ 13,500

 £ 13,500

Membership, Web-Database-Online memb cost

 £ 10,000

 £ 10,000

 £ 10,000

Membership, Other

 £ 500

 £ 500

 

Events & Comps, Support

 £ 4,000

 £ 4,000

 

Events & Comps, Other

 £ 1,000

 £ 1,000

 £ 1,000

Governance, AGM, GM & Conferences

 £ 2,000

 £ 2,000

 £ 2,000

Governance, Board

 £ 6,000

 £ 6,000

 £ 6,000

Governance, Committee & Groups

 £ 5,000

 £ 5,000

 £ 5,000

Governance, Affiliation to IOF

 £ 6,000

 £ 6,000

 £ 6,000

Developing the Sport

 £ 100,621

 £ 18,000

 

Perf. Talent Development

 £ 200,249

 

 

Perf. WOC Squad Support

 £ 21,280

 £ 21,280

 

Perf. TrailO & MTBO

 £ 2,000

 £ 2,000

 

Salaries

 £ 444,059

 £ 175,622

 

Salaries recharge (Sport England)

 £ 107,763

 

 

Pension Contributions

 £ 3,766

 £ 1,420

 

Training, Staff

 £ 2,000

 £ 2,000

 

Expenses, Travel & Subsistence

 £ 31,700

 £ 12,500

 

Expenses, IOF Post holders

 £ 2,000

 £ 2,000

 

National Office & Overheads

 £ 77,630

 £ 47,910

 £ 47,910

Promoting the sport

 £ 10,000

 £ 10,000

 

Finance, Audit, Bank Charges & Interest

 £ 5,900

 £ 5,900

 £ 5,900

Corporation Tax

 £ 1,120

 £ 1,120

 £ 1,120

Total Expenditure

 £ 1,083,088

 £ 372,752

 £ 98,430

         

In 2016 we are planning to raise £240,000 from membership, levy, major events and trading which leaves around £142,000 when the ‘prudent’ budget is considered. This £142,000 can be used for employment costs and any small programmes that are considered a priority.

To maintain a small staff of 4 will cost approximately £100,000 and then approximately £25,000 for each additional members of staff – this is a very rough approximation as it will depend on experience, specialist skills etc. Based on our current staffing model the on-costs associated with our 6 National Office based staff are approximately £163,000. The precise staffing structure will need to be determined at a later date when the Strategic Plan is agreed and the funding situation confirmed.

Assuming the decision is to maintain our status as a NGB of sport and able to deliver reasonable services to members and clubs we need to cover areas of work including, talent & performance, development in some form, and then at least 2 or 3 from events & competition, training & education, marketing and commercial.

This leads us to the position where to cover the functions and responsibilities identified in the diagram above British Orienteering will need a staffing structure of 6 or 7 full time equivalents. There will still be gaps in services which will need to be covered probably by volunteers.

This structure with expenses and a small amount of programme leads us to a required expenditure figure of at least £275,000.

In summary to deliver a viable British Orienteering organisation functioning as a NGB and delivering an operation as minimal as possible will cost £275,000. To deliver what we are currently delivering without the government funding will cost £372,752.

This is against an income that is projected at £240,000 in 2016 with the current membership and levy fees.

Financial Reserves: At the moment I’ve left our financial reserves out of this equation. The reserves are currently at a healthy level, £489,221 and exist to help British Orienteering in the situation of a crisis that we need cover for. It is perfectly reasonable for the Board to use the reserves to deal with a crisis such as loss of funding although they are conscious that the reserves can only be used as a temporary measure to transition us from one funding scenario through a crisis to a longer term financially viable solution.

 

Tomorrow we’ll consider how we might plug the gap in funding and what the options might be.

 

Mike Hamilton


Posted on Wednesday 16th March 2016